Canaries in the Coal Mine? Six Facts about the Recent Employment Effects of Artificial Intelligence
- Economics of transformative ai
- New measures of the economy
- Working Paper
Abstract
This paper examines changes in the labor market for occupations exposed to generative artificial intelligence using high-frequency administrative data from the largest payroll software provider in the United States.
We present six facts that characterize these shifts. We find that since the widespread adoption of generative AI, early-career workers (ages 22-25) in the most AI-exposed occupations have experienced a 13 percent relative decline in employment even after controlling for firm-level shocks. In contrast, employment for workers in less exposed fields and more experienced workers in the same occupations has remained stable or continued to grow.
We also find that adjustments occur primarily through employment rather than compensation. Furthermore, employment declines are concentrated in occupations where AI is more likely to automate, rather than augment, human labor. Our results are robust to alternative explanations, such as excluding technology-related firms and excluding occupations amenable to remote work. These six facts provide early, large-scale evidence consistent with the hypothesis that the AI revolution is beginning to have a significant and disproportionate impact on entry-level workers in the American labor market.
Authors
Erik Brynjolfsson
Jerry Yang and Akiko Yamazaki Professor
Erik Brynjolfsson is one of the world’s leading experts on the economics of technology and artificial intelligence. He is the Jerry Yang and Akiko Yamazaki Professor and Senior Fellow at the Stanford Institute for Human-Centered AI (HAI), and Director of the Stanford Digital Economy Lab. He also is the Ralph Landau Senior Fellow at the Stanford Institute for Economic Policy Research (SIEPR), Professor by Courtesy at the Stanford Graduate School of Business and Stanford Department of Economics, and a Research Associate at the National Bureau of Economic Research (NBER).
One of the most-cited authors on the economics of information, Brynjolfsson was among the first researchers to measure productivity contributions of IT and the complementary role of organizational capital and other intangibles.
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Bharat Chandar
Postdoctoral Fellow
Bharat Chandar is a labor economist working on understanding AI’s impact on work. His recent projects include work with Erik Brynjolfsson and Ruyu Chen tracking “canaries in the coal mine” for entry-level employment changes in jobs exposed to AI. He also recently surveyed the state of knowledge about AI and labor markets.
His ongoing work has focused on three areas. The first asks, how will workers adjust if we see AI-driven changes in hiring? Which workers will have an easier or more challenging time if displaced, and where should we target support? The second asks, how can we use AI to make it easier for people to learn new things and pursue new forms of work? Third, how will impacts of AI differ across the world?
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Ruyu Chen
Research Scientist
Ruyu Chen is a research scientist at the Digital Economy Lab and the Stanford Institute for Human-Centered Artificial Intelligence (HAI). Her research lies at the intersection of the economics of innovation, information systems, and business strategy.
She focuses on two main areas: information technology adoption and firm performance, where she examines the drivers of IT adoption within firms and its impact on innovation and market performance; and AI and the future of work, where she leverages large-scale payroll data to study how emerging technologies, particularly generative AI, are reshaping employment, wages, skill demands, and organizational structures. Her work has been published in leading academic journals, including the Strategic Management Journal.
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